An Overview of EPA/CEPA Policy
As Bangladesh is scheduled to graduate from least developed country (LDC) status in 2026, a transition from the current unilateral preference regime to reciprocal free trade frameworks such as FTAs and CEPAs is becoming increasingly unavoidable. Korea is pushing ahead with a Comprehensive Economic Partnership Agreement (CEPA) with Bangladesh, while Japan and the European Union are also engaged in EPA-related negotiations. This analysis brings together the likely impact of LDC graduation, changes to unilateral EPA regimes, the progress of Korea-Bangladesh CEPA talks, and the record of exchanged trade letters.
Impact of LDC Graduation
Bangladesh met the criteria for LDC graduation in 2018, and formal graduation is now set for 2026. Although a three-year grace period will apply, existing trade preferences such as GSP, EBA (Everything But Arms), and DFQF arrangements are expected to phase out gradually after that point.
| Market | Current Tariff | Post-Graduation Tariff | Affected Products | Urgency of Response |
|---|---|---|---|---|
| EU | 0% (EBA) | 9.6% (GSP+) | RMG apparel | High |
| Korea | 0-5% (GSP) | 8-13% (MFN) | Textiles and leather | Medium |
| Japan | 0% (GSP-LDC) | 3-10% (GSP) | Apparel and seafood | Medium |
| Canada | 0% (LDCT) | 0-18% (MFN) | Apparel and farm products | High |
| Australia | 0% (DFQF) | 5% (MFN) | Apparel | Low |
Progress of Korea-Bangladesh CEPA
Korea and Bangladesh launched a joint study on CEPA in 2022 and later agreed to move into formal negotiations. The objective is a broad agreement covering goods, services, investment, and economic cooperation.